News, Analysis and Perspective for Solution Providers and Technology Integrators

IDC: Internet Of Things Gaining Traction As Enterprises Look For The Next Level Of Data Analytics

More enterprises are pivoting away from proof-of-concept projects to actual scalable IoT deployments in 2016, finds a report by market research firm IDC.

By
Lindsey O'DonnellSeptember 21, 2016, 03:40 PM EDT

The Internet of Things market is gaining traction as enterprise companies pivot away from proof-of-concept projects to actual scalable IoT deployments in 2016, a report by market research firm IDC found.

According to the report, 31 percent of organizations have launched IoT offerings incorporating cloud, analytics and security capabilities, while an additional 43 percent of companies are looking to deploy offerings in the next 12 months.

"I think we're moving past the early nascency [of IoT], and organizations are really starting to understand the benefits that IoT can bring," Carrie MacGillivray, vice president of mobility and Internet of Things at IDC, told CRN. "There's a lot of education taking place in the market, and now IoT is such a hot topic that customers are talking about it with vendors or attending events to learn more."

As the Internet of Things market continues to grow, MacGillivray noted that a strong partner ecosystem is essential – and many enterprises actually perceive the channel and systems integrators as playing an increasingly important role.

"[We're seeing] the rise of analytics vendors and systems integrators as perceived leaders," she said. "Meanwhile, IT hardware and network vendors are falling in terms of how they're perceived as leaders … as customers realize that IoT is all about the data."

In addition to systems integrators, more enterprises are seeing vendors leading with an integrated cloud and analytics offerings as "critical partners" in an organization's IoT investment, IDC found.

Nico Genet, director of IoT and co-founder of SMG3, a Schaumburg, Ill.-based solution provider, stressed that customers' focus on analytics and cloud IoT vendors makes sense because "data is the new currency."

"You need to have that next level of analytics because end users want to see more beyond just the hardware," he said. "With any ruggedized device, end users want to go deeper. That next phase [of IoT] is happening; customers want to use the data faster and more wisely."

While IDC's survey found that 55 percent of respondents see IoT as strategic to their business to help them compete more effectively, there are still challenges – many organizations cited lack of internal skills as a top concern in deploying an IoT offering.

"Businesses are still looking for where the initial investment and projects should take place in their organization, whether it's in line of business, marketing or [research and development]," said MacGillivray.

Another top concern of enterprise decision-makers, in addition to up-front and ongoing costs, is security.

"While companies say security is getting better for IoT, it's still concerning to a lot of end users," said Genet. "That's not stopping IoT, but it's slowing the absorption."